2013 Personal Year In Review On Financial Samurai

Happy New Year! Time always moves faster the older we get. One day I’ll lose my mind and hopefully these journal entries will jog my memory. Although less than 20% of my life is discussed in my writing, I hope it’ll be enough to jolt the other 80% alive if I forget. If not, the thousands of pictures I take every year will.

2013 started full of promise and ended way better than expected. I was looking for a conservative 9% increase in the S&P 500 to 1,551 after a 13% year in 2012 and we closed up 30%! I became more bullish after my target was achieved in the first four months of the year and positioned more aggressively, but not enough unfortunately. It’s fun to keep predictions set all year so we can look back and see how we were feeling back then.

One of my biggest challenges all year was maintaining focus. It’s way too easy to sleep in every day, binge watch shows on Netflix, stuff my face with donuts, travel for weeks on end, and have days blur together with so much free time now that I no longer have a day job. As a result, I set one year, three year, and five year business revenue goals to minimize the amount of meandering. So far, so good. But to be quite frank I’m losing my desire to make more money. I just don’t care anymore, which is part of the reason why I left Wall St. I just want to feel useful.

POSITIVES FOR THE YEAR

1) Survival. It might be slightly comical to list “survival” as the #1 positive for the year when you’ve got a livable passive income stream and deferred compensation, but survival is really what it’s all about in the first three years of entrepreneurship. It’s not easy making money from nothing and 2013 was my second year, but first full year of trying to make it happen.

One of my biggest fears leaving Corporate America was the possibility that my efforts would not correlate with reward. I thought to myself, perhaps the only reason why I was getting paid was due to my firm’s reputation. That said, I didn’t feel I was getting rewarded commensurately with what I was bringing in so I left instead of complain. Complaining is the worst thing someone can do if they are unhappy about their situation. Do something or shut up. If I failed to grow revenue and profits, I would feel like an enormous failure.

Giving up way too soon is something I fear as well. When all you’ve got is yourself to figure everything out, entrepreneurship can get quite difficult at times. I’ve also had this very heightened temptation since 2007 to just kick back and move back to a fully paid off house in Oahu. This would be the complete easy way out thanks to my grandparents who are no longer here. Hawaii is good living, but it will trap you into complacency. I give mad props to anybody who’s ever tried to make it on their own, when temptation is all around for them to do nothing.

2) Business Profitability. The internet business is the best business in the world due to scalability. I will never run a bricks and mortars company after experiencing running an online business. Costs are largely fixed after server, domain, maintenance, and design costs. Revenue is practically infinite given the enormous number of English reading people on the internet.

Growing revenue in 2013 was daunting because 2012 saw a triple digit jump over 2011, albeit from a smaller base. Fortunately, revenue grew by over 60% and operating income grew even more due to operational leverage. If I can maintain flat revenue growth in 2014 I’ll be happy because there are so many exogenous factors that go into an internet business that is out of my control. Site traffic was rocketing to the moon in 1H13 only to normalize in 2H13.

The level of revenue is enough to take care of a family of four in San Francisco based off my own standards. Before that family comes, I will aggressively save as much as I can. All I can do is stay consistent, find the best products, grow awareness, ask for your support, and hope for the best.

2013 Case-Shiller home price growth by city. SF +24% YoY.

3) Personal Finance. Hopefully everybody had a great year in personal finance thanks to a raging bull market! My net worth increased by roughly 32% – 42% according to my Personal Capital net worth dashboard. Anybody else kind of addicted to tinkering around with their net worth online? Playing with all the variables and doing the calculations is fun when you’re making money.

The range depends on what value I want to assign to my properties. This is the largest net worth growth since 2007 and much larger than I expected because I’m not in the growth phase of my life anymore. My bogey is for a lower risk, 10% net worth annual increase so I’m very skeptical about the sustainability of this increase.

The net worth growth consists of:

* 60% revenue growth in my online business which is valued at 2.7X annual revenue for the past three years. The valuation multiple is subjective, but I personally would not sell my revenue streams for anything less than a 3X multiple because I’m having a ton of fun, cash flow is steady, and operating margins are high. If I sold all my online properties, I don’t know what I would do with all my free time. The business is where I spent most of my time and the valuation is now a meaningful part of my net worth which I’ll discuss a little more of from now on.

* A 30% – 60% increase in home equity due to a 15% – 30% increase in property prices depending on what type and where. I’ve chosen to use a 15% increase in my calculations and have also taken a 15% discount to Zillowestimates. The nation as a whole showed a 13.6% YoY increase in property prices, so I think using a 15% figure is conservative since things are nuts here in the SF Bay Area. One report has Palo Alto home prices 40% HIGHER than 2006 peak levels. I’ll be posting a dedicated article on the repercussions of aggressive housing price increases in the city. Facebook, Twitter, Google are at all-time highs and I’m pretty sure rents and house prices will continue to rise by at least 5% in 2014.

* A blended 25% increase in equities. I operate my IRA like a hedge fund, taking big bets, going in and out of positions, and also hedging which is not the best in a bull market. My IRA is up about 16%, which is good compared to the overall hedge fund index (HDG +5%), but bad compared to the S&P 500 +30%. The rest of my equity exposure is in structured notes linked to indices with downside protection. If there is ever a downturn again, I want to still be making money.

* Risk free assets are up about 7% due to a 3.8% rise in CD income and some excess savings that has yet to be invested. I haven’t bought a single CD in the past two years and have invested as much as I can into the stock market, P2P, or alternative investments during this time period.

My net worth grew roughly 7X greater than my income, which is kind of scary and awesome at the same time. Part of the reason for such a large multiple is because my income isn’t as large as it once was, but it is still better than a poke in the eye. Please build your financial nut so your money works for you so you don’t have to. Real estate continues to be my favorite asset class.

4) Balance. I readily admit I’ve got workaholic tendencies that are driven by the fear of being broke due to my upbringing overseas. Images of poverty growing up in Malaysia in the late 80s and my dozen visits to China and India in the 90s and 00s are often on my mind. I feel a constant guilt of being able to grow up in America after middle school. Why was I raised by two parents who saved enough to allow me to go to college while millions of other kids don’t even have a chance of finishing high school? Why did the recruiter pick me out of the many equally or better qualified candidates for my first job? How the hell did I last for 13 years in finance when there were more than 25 rounds of layoffs during this time? And so on…

Guilt makes me work harder than perhaps I need to because I never feel like I deserve anything. I was just lucky and lucky is not an admirable trait. Entrepreneurship has given me balance because I finally feel full pride in my efforts. I know Financial Samurai would not be where it is today if I didn’t spend the hours writing three to four articles a week for the past 4.5 years. I know the Yakezie Network has helped other bloggers stick with their sites for longer than they would have. I know that YakezieNetwork.com, the finance ad network is completely up to me to get going. So far I’m not doing a great job at promoting because I think it’s an absolute no-brainer (case study). Who wouldn’t want to make hundreds or thousands of dollars extra online? If it fails, then I’m OK with it because it was all my own failure.

Entrepreneurship has curiously allowed me to work less hours a day, feel less guilt, and see more congruency in my efforts. All three equal more happiness. There’s still a lot of luck involved, but so far luck is in the minority camp. My stressometer has fluctuated between a 1-3 out of 10 all year compared to a 7 out of 10 while I was working. The only thing that stresses me out now is when my site won’t load properly because I’m thinking about your user experience.

5) Family. I was able to spend more time with my family in 2013, a consistent top priority every year. One of my fondest memories was having a nice two hour conversation with my sister about life over breakfast. I don’t remember the last time we ever talked for more than one hour at a time.

Another great moment was being able to go with my father to Warriors basketball games. He came to visit to see two games one month with my mom, and then came back the very next month because the Warriors made it to the playoffs! We got to see all three games against the Spurs and it was the best! My parents, my sister, and I never lived in the same state since I left NYC in 2000 so it’s good to connect more often now that I’m free.

Spending seven weeks in Oahu and three weeks in NYC this year to partly see my family really helped give me an idea of what living in either place would really be like after San Francisco. I was also able to travel for 12 weeks in 2013, the first time since college.

6) Health. I’ve got this mild obsession with weight and fitness even though I’m not overweight at 5’10”, 162 lbs because I grew up as an athlete who was once a very fit 150-155 lbs and could bench 215 lbs. I’ve written in the past how the ideal weight pisses me off, and I’m happy to have hovered all year in the 161-164 lbs range with relative ease. When I was working my weight would fluctuate in the 166-170 lbs range. It’s much easier to stay in shape when you can play tennis or go for a hike in the afternoons everyday and not have to take clients out for some juicy rib-eye steaks several nights a week! Oh how I miss the corporate card and client entertainment.

2013 is the 12th year I’ve been back pain/sciatica free thanks to Dr. Sarno’s book, Healing Back Pain. I no longer grind my teeth, suffer from TMJ, or have painful tennis/golf elbow anywhere. Going through life pain free really makes me wonder how much stress kills us! If we don’t have our health, we might as well have nothing. Perhaps being healthier is the greatest reward of financial independence after all.

MISSES OF THE YEAR

1) Book Sales. I think I have a goldmine with the book, “How To Engineer Your Layoff: Make A Small Fortune By Saying Goodbye.” Studies have consistently shown a vast majority of people don’t like their jobs but don’t leave due to pay, healthcare, and fear of long term unemployment. I felt golden handcuffed as well because who leaves a six figure job to be a starving writer? But I did leave because I was able to negotiate a severance package and had a very clear plan. The severance provides for roughly six years of living expenses at my current rate.

Despite the freedom to do more of what you want as a value proposition to buy my book, my book sales continue to be uninspiring with roughly 30 sales a month on average. Perhaps the $48 price tag is too high? But what is $48 when you can empower yourself to negotiate potentially thousands of dollars in a severance and get your life back? One client was able to manage a $180,000 severance in 2013!

If I didn’t leave in the spring of 2012 I would have felt like I wasted two years of my life being a chicken shit for not pursuing my entrepreneurial endeavors. I need to do a much better job marketing the book, getting affiliates who write about career, entrepreneurship, and lifestyle to sign up, and test out the sales price. The feedback I’ve received from readers has been really positive so far.

2) Surgeries. I’ve had my face operated on twice this year! Once was because I bashed my lip from too much partying. I got a hotel staffer to rush me to the ER and stitch me up. Seeing the anesthesia needle get injected into a gaping hole while the liquid squirted into my mouth because there was no wall was disgusting. I have pics but I don’t want to make you vomit.

The second operation happened just last month. I’ve had this hard lump in my right cheek for the past year that finally began to grow. Fearing cancer I YouTubed it and discovered it was a sebaceous cyst. The dermatologist cut open a 3/4 inch hole and began digging into my cheek to cut the thing out. He said it wasn’t carcinogenic, but better safe than sorry to take it out especially since it was uncomfortable. I’ve now got this puckering at both ends where he stitched me up which will last for four months. If I was a male model, I’d be pissed! Good thing I’m only a writer.

I have to admit something weird. With each trip to the doctor I kind of reveled in the pain. I haven’t felt a lot of pain in so long that I was beginning to dread something massively bad would happen. These small knocks are like little earthquakes relieving pressure to prevent the big one from happening. Thank you sir may I have another!

3) Too Financially Conservative. Although I sleep well at night knowing that if all goes to hell, at least 25% of my net worth will still be intact, I was too conservative in my asset allocation for 2013. My mindset was for a realistic 9-10% increase in the stock market so my rollover IRA positions reflected this view. Perhaps from a “value at risk” perspective, my IRA performance was fine since I run the portfolio like a hedge fund, but from an absolute point of view it was quite an underperformance compared to the S&P 500 index. What I should have done was buy triple levered ETFs!

When I wrote “Don’t Stop Fortune Hunting,” the post was a challenge for me to take more stock risk. Instead of taking the normal $50,000 – $100,000 stock positions, I was secretly challenging myself to take $200,000+ positions to go for broke! If I followed through on my challenge, I would have made $200,000+ in BIDU and SINA alone instead of just ~$40,000. The bull market just amplifies my fear of being too conservative. The only asset that saved me was real estate, where I’m levered 2:1. But even 2:1 is relatively low leverage compared to the average. For 2014 I need to be more greedy, which is probably where I’ll really start blowing myself up!

My goal has always been to grow my net worth at the same pace of growth as the S&P 500. I guess I was able to do this in 2013, but equities was a drag not a boost to the overall 30% growth benchmark. Equities will always be less than 40% of my net worth just because of my property and risk free assets. With the online business growing to a relative significant size, equities will probably never be more than 30% again if all else continues to grow.

4) Self Promotion & Outreach. I’m pretty pathetic when it comes to self promotion. Unlike some of my peers, I don’t like to constantly write about myself. I’d much rather write about scenarios and have us analyze the situation together as a team. I’m always impressed with people who can Tweet their posts multiple times a day, show long video monologues, and constantly post pictures of themselves over social media. I never knew what a “selfie” was until this summer!

But if I am to grow, I’ve got to adopt a more “look at me” approach. The first act is to study my friends on Facebook. One guy posts a picture of himself every week sitting in a different sports car and he gets tons of likes and comments. There’s never a girl in the picture, but who cares? Another person changes her profile picture every single week, which seems to work in getting lots of attention. Another friend checks into every single restaurant and bar to display her fabulous life. Once I’ve gotten more comfortable in self-promoting, perhaps I can go the more mature route by doing TV and radio interviews with established media outlets.

I also do nothing to get readers to subscribe via RSS or RSS e-mail. There’s no pop up box reminding you to subscribe, nor is there an easy to check subscribe button in the comments section or at the end of each post. I’ve also done a piss poor job at promoting my private “quarterly” newsletter. These are two different things mind you. One feeds my posts to you via RSS or e-mail. My private newsletter is content not published publicly that is supposedly once a quarter. All this lack of action stems from my lazy attitude of, “If you want to keep in touch subscribe. If not, no big deal because the choice is up to you.” Sometimes there just needs to be a slight push. For 2014, I plan to write more about investment ideas in my private quarterly newsletter.

I haven’t done as much online outreach in 2013 as I did in 2012. I missed the financial bloggers conference in St. Louis and I didn’t go to any other conference. Conferences are a blast, but I was too busy doing research in Europe and NYC this summer and doing my own thing in Oahu and Tahoe this winter.

The community is very helpful in providing motivation and support when you’re down or have a new product to launch. I need to do a better job getting involved. The easiest direction is to participate in my very own Yakezie Forums.

5) Home Maintenance. I’d be remiss not to include some home maintenance issues this year. The beautiful 30 year old Yoshino Cherry tree with pink flowers outside of my house caused a lot of damage this summer. Her roots broke my main water line and caused massive leakage on the sidewalk, resulting in no water to the house for three days. I had to hire a guy to break up the sidewalk, shave the root, install a snake pipe, and repave the sidewalk for $1,600 (picture)! I might have to spend another $1,000-$2,000 to redo more cement blocks because I can see more uneven blocks due to the roots.

I’m a tree lover and have planted three trees this year – a pumelo tree and a himmayudin mango tree back in Oahu (top picture) and a mandarin orange tree in SF. I also planted my Strawberry Tree in front of my house 8.5 years ago when I first moved in. For those city dwellers who plant trees in front of their houses, bake in thousands of dollars of future cement repair!

Besides repairing the main water line, I had to buy a new washer for $640 (Black Friday Sale $200 off baby!) because mine broke after 8 years. I’m also considering biting the bullet and buying a new $4,000+ Thermador Professional single oven to match my range because the LCD panel doesn’t turn on anymore. I can’t believe Thermador Professional ovens are so expensive, but I’d like to match my other appliances.

ONWARD!

2013 was a year where all the hard work to improve our personal finances paid off. We should be proud of our accomplishments and always look to protect what we’ve made. If you build your financial nut past the cross over point, you seriously never have to work again so long as the economy doesn’t implode.

The theme for 2014 and 2015 continues to be of congruency. I like to think we are exactly where we want to be due to our own efforts. Nothing can really push us to change unless we are sufficiently agitated to take necessary steps.

START AN ONLINE BUSINESS

It’s been over six years since I started Financial Samurai and I’m actually earning a good passive and active income stream online now. The top 1% of all posts on Financial Samurai generates 31% of all traffic and revenue.

I never thought I’d be able to quit my job in 2012 just three years after starting Financial Samurai. But by starting one financial crisis day in 2009, Financial Samurai actually makes more than my entire passive income total that took 15 years to build. If you enjoy writing, creating, connecting with people online, and enjoying more freedom, see how you can set up a WordPress blog in 15 minutes with Bluehost.

You never know where the journey will take you. In 2015, I fulfilled a bucket list item by visiting the ancient temples of Angkor Wat in Cambodia, while stopping over at the DMZ in Korea, and attending a friends wedding in Malaysia. Starting this website is the best career/ lifestyle move I’ve ever made.

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of all the chaos. After 13 years of working in finance, Sam decided to retire in 2012 to utilize everything he learned in the business to help people achieve financial freedom sooner, rather than later. Sam is a big advocate of using free financial tools like Personal Capital to help people grow their net worth, track their cash flow, x-ray their portfolios for excessive fees, and plan for retirement. The more you know about your money, the better you can grow your wealth!

You can sign up to receive his articles via email every time they are published three times a week. Sam also sends out a private quarterly newsletter with information on where he's investing his money and more sensitive information.

Looking good, Sam! It sounds like you are doing great financially, and have enough projects to keep your mind engaged.

One comment on taking risks. Don’t blow yourself up! Wait till the next market correction then take outsized risks. You can financially afford to lose six figures but can you handle the psychological impacts? It would suck pretty hard core.

I love your love of trees. I have often thought of planting some fruit trees here in North Carolina. So far we have only planted decorative flowering trees like mimosas, dogwoods, and redbuds. And I intentionally planted away from the water and sewer lines running to the house from the street, and away from our driveway. Two of the trees might eventually buckle the sidewalk in 15-20 years, but I hope to trim them back a little each year to stunt their growth.

Thanks Justin. It doesn’t seem like the markets are going to blow up any time soon with a still accommodative Fed, rising earnings, and no geopolitical wars on the horizon. We could very well have 3 more years of steady growth. Who knows the future. I’m just going to diversify and really focus on what I can control more, which is my business.

I tend to think we’ll see markets head higher, but I also know every few years there is a correction. It’s easy to see double digit gains year after year and think the market is a money making machine that always goes up. That being said, I’m still ~97% in equities, so I’m betting on continued growth long term.

For now, the wife is still working. That won’t last more than a year or two, then it will be just the portfolio. That’s why I’m thinking about getting a little more into bonds and/or cash. Even 10% allocation to bonds/cash would be enough to fund our living expenses for 3 years in addition to the dividends we receive. Our dividends will just about cover our core expenses each year, and then it’s a matter of how much principal we want to sell to fund discretionary expenses.

Sounds like you had a great year! I did as well and I hope to make 2014 even better.
I took over my parents business which we ran together.
I bought 3 rentals
I sold 190 houses as a realtor
I sold 10 fix and flips
I got a life coach
I bought a new personal house
I hired my best friend to work with me(he quit his corp job)
I started a blog
I became a guest blogger for a major site
Our twins turned two!

Thank you! The majority of my sales are from my Reo listings. I am also a HUD listing broker. Besides me I have 8 people on my team that help with inspections, BPOs, contracts, management and I have four other agents. My goal is to sell 300 in 2014. We are ramping up lea generation and marketing significantly.

Not necessarily related to finances, but since you mentioned it, and health is more important to me than money…

+1 for Dr. Sarno’s book “Healing Back Pain”.

I had a stint of that two years ago, to the point where sneezing would bring me to my knees in pain. Spent a year with multiple doctors, lots of physical therapy, and no real progress. Someone recommended that book to me, was pain free in a few weeks, with no issues since. Absolutely amazing.

Excellent! Another Dr. Sarno fan. Crazy how simple and powerful it is yes?

Not having to work really makes a big difference towards stress levels. You start remember back to those days when you were a kid without a care in the world. Less pain, less stress, and a likely longer life is a good benefit to financial freedom!

Hits and misses of 2013… sounds like you have had an interesting year… but then as you said a portion has already been identified in you post. In our household, all in all it has been a slow year…

We did some minor traveling. Went to Las Vegas, took in a couple of shows, and visited some of the great regional and national parks of the area. Valley of Fire, Red Canyon, and Hoover Dam are all worth a visit. Also took in Lake Tahoe… so I managed to mark some items off of my bucket list.

I was successful in growing my retirement accounts enough that I was informed by my trusted broker on 12/31 that I can ‘retire’ comfortably on 1/1/15. This is 3 years earlier than originally planned, but each year I ask if I am there yet and this year he said yes… yea!!!

An additional positive this year and one that some may not agree with was that I was able to care for my father during his last 3 weeks of life. It was the most difficult and fulfilling thing I did all year. It truly let me know what I am made of and that I am truly capable of doing anything I put my mind to. If there were any doubts before there are none now.

I think my only miss this year was professionally. I work in a technical field at a major bank. For the last four years I have been unable to post to any other position (internally or externally) and there are still no advancement opportunities within our current department. I have managed only the minimum raises since I am already at 105% of the compa-ratio for the position. Hence one the decision to leave in 2015… of course this will only be after I try to negotiate a severance. Yes Sam I am going to try…. if it works, the severance package would provide me with about 5 months of pay. Wish me luck.

Great year, Sam! I think its just as important to look back on what we accomplished (or didn’t) over the past year as it is to set goals for the new year.

2013 was great for most of my investments, and I grew net worth approx. 40%. I would attribute it most to gains in real estate & stocks, and developing better money saving habits (thanks in large part to your website)!

I also got a big payoff from investment in myself. I got in better physical shape and developed a much more positive attitude. I think 2014 will be even better.

Congrats on a successful year Sam! You certainly did a lot and traveled a lot too. Twelve weeks is impressive! Nice job on your family and fitness goals. I totally failed on mine. I saw some family, but not as much as I could or should have. And for fitness although I managed to eat relatively healthy all year, I really didn’t exercise much at all. That has to change!

I’m looking forward to this new year and hope we all do well. Best wishes to everyone and Happy New Year!

Thanks for sharing both the hits and misses, Sam. I, too, love tinkering with my net worth, want to get to my prize fighting weight of 155, and someday might need to engineer a layoff, too. I’ll work your book into my budget in the coming months. Never too early to start thinking of an exit strategy.

We can always dream right? How far off of your fighting weight are you? 155 lbs is my fighting weight as well but I’ve got to really try to get below 160 lbs, whereas I don’t have to try to stay at 163-165 lbs, so I don’t try! haha

I’m currently at 170, so I have some work to do. My weight went up when my wife started her research down in Peru, as I’ve been living (and eating) like a bachelor again. I’m really testing the limits of what happens when I don’t try…

You had a great year and I do think that you are useful. Your statement “I just want to feel useful” sounded a little sad.

You are helping lots of investment newbies, like myself, learn how to invest. If you don’t think helping the blogging community expand their businesses and helping people who are interested in financial freedom protect and grow their money then maybe you should try and help people in your community with their finances?

My community has volunteers who offer free tax return preparation for lower income people who can’t do it themselves. There must be other opportunities to help people and feel useful.

I know how to save money and negotiate with banks and utilities to protect the money that I do have but a lot of people are clueless as to the basics of everyday finances. Maybe you could help people who are financially challenged learn? It could even be in the form of a new blog with simpler advice such as how to avoid bank fees and how to know if the life insurance salesman is offering you good advice or if he is just out to make money for himself.

Thanks Jane. I didn’t think about the “useful” comment as sad, but now that you mention it’s sad, it does sound a little sad! I think I just want to feel like a productive member of society. To give back by sharing what knowledge I have feels good, which is part of the reason why I do it. I don’t think I can help people who don’t want to be helped.

Starting another site would take too much of my time unfortunately. I’m trying to limit my writing to 4 hours a day max so I can do other things working a day job wouldn’t allow me to.

Good stuff volunteering to do free tax return prep! What about teaching them how to do it themselves for next year? Teach a person to fish right?

A lot of people who use the free tax return services from year to year are challenged in some way such as new Canadians who don’t read english or seniors with vision problems.

The Canadian government has eliminated paper returns and everything must be submitted electronically and these volunteers use the internet at churches and community centres to complete returns for those who cannot do it themselves and may never be able to learn.

Congratulations on the great year Sam, and I’m glad to hear the procedure went well. I like the breakdown in the net worth changes. I’ve been using Yodlee MoneyCenter for the last five years, but I will sign up for Personal Capital soon, as it sounds like it has a much better Investments section.

2013 was a great year for me, and I was able to increase my net worth by 43% thanks to the equity market performance and a great year end bonus. 2014 will bring about a lot of changes for me. After 2.5 years in Manhattan, I’ll be leaving in late January to move back to Boston and join a quantitative equity hedge fund. I just bought my first condo (2BR/2BA) in the city, and I’m really excited to move in. I know real estate in an urban setting has been one of your favorite investments in the past, and after running the numbers, it looks like buying should be a much better scenario than renting for me personally.

I’m also a serious tennis player (4.5ish), and I’ve been wanting to join an indoor club for a long time. I’m pretty sure I’ll join, but between the membership and court time it definitely is not cheap. Even though I’ll be getting a 35% raise in my new role, I’m still a little hesitant to sign up as it’ll also mean buying a car again (thinking a 5-7 year old reliable sedan with under $100k miles), and I’m sure I’ll be spending a lot of money furnishing the condo.

It sounds like 2014 will be another amazing year for you. I’d be very interested to hear more about internet businesses in the future, especially the initial starting phase and how your readers might be able to launch their own businesses. Best of luck in 2014!

I’ll definitely miss Manhattan, and it was the perfect place to be in my mid 20’s. Like you guessed, I’m originally from the Boston area, so the move was more to be closer to family and friends. I wanted to go to NYC to get the experience to allow me to move to a top fund, so I’m lucky how well things worked out.

That’s a good call about the possible connections I’d make signing up for the club. I’ll definitely sign up once I move. It’ll help me keep in shape and allow me to do something I love year-round.

I’m currently at a credit fund so it didn’t have the huge run-ups like the equity market, but it did outperform it’s benchmark quite significantly, so still was a great year. I’ll be moving to an equity fund, so it will be a very interesting change. Sounds like they had a good year, but it’s pretty hard to find data for private funds.

Welcome to my site. Perhaps it’s because it’s so hard to make money with your own too hands that I’m burning out. But I’ve reached my income and net worth goals already, and an incremental dollar just doesn’t do it as much as the incremental effort.

1) I have been spending lot of time on your blog lately & have been going through your lot of old posts but didn’t know about your private newsletter. (Hint: I agree that you are doing a bad job publicizing your stuff :-)). Wondering, why do you need a private newsletter at first place? Post the stuff on this blog only?

2) You highly recommend Personal Capital website. I created my account on the website but didn’t use the website because of the fear that they may missuse/leak my UN/Passwords of my bank accounts etc. Any advice? I currently use spreadsheet to track my NAV but see the value that the website brings.

Wish you a very happy & prosperous new year. Hope to continue to see such useful posts :-)

Excellent to hear I’m not doing a good job publicizing my stuff! Again, it’s my, “If you want to keep in touch, learn, get rich, then sign up. If not, all is good too!” attitude.

Regarding the fear of using online tools, not sure what I can tell ya. If a company breaches the confidence and privacy of its users then it goes under. I would never recommend anything I don’t believe in or use myself. If you’re uncomfortable, use Excel, but even that is susceptible to theft. If you are really uncomfortable, a pencil and paper will do too! :)

Curious about your risk tolerance levels. How did you do in 2013 and where are your assets allocated?

I would have to say that 2013 will probably go down as one of my favorite years ever…both personally and professionally. I’m kind of at the point now where it is hard to have huge swings in net worth increases which is a good thing. I ran the calculation & not counting investment income I only spent 27% of my after tax dollars from the day job while not wanting for anything more…here is where the sad part is, I paid the Government double what I actually spent living life. That is probably the one area in 2014 that is going to get some more attention and thought. Living life well is actually pretty cheap and even though I love what I do, it is frustrating to see such a huge chunk of my efforts getting paid to an entity that can balance a budget or live within its means. I don’t want to pull the ripcord here just yet, but reading your blog helps put things in perspective, keep up the good work in ’14!

Happy to be doing my part here in supporting this great country! Have you done an post on asset allocation by net worth? It would be tough to do, because everybody’s # is different for a target NW to retire, but say if you are 50 years old and have $10M and your annual burn is only $200k…what does a proper allocation look like? Just curious if you’ve explored that since you are great at throwing #’s out with your opinion on that type of subject.

With all this talk of people saying they should have been more aggressive in ’13, it makes me wonder if everybody would think the same way if the market was down 25% (of course not). Hell even my 70 year old parents were complaining they should not be so conservative!

I can’t be the only one out there who isn’t bothered by not experiencing the full pedal to the medal 2013 results as if I were 100% all in market…I’m totally content to keep hitting singles and the occasional double like this year.

I was quite happy with my returns for the year since I was in around 95% for most of last year.
As I posted on my site, I’ve tipped it back to lock in some of the gains to about 70%-75% in the market because I believe there will be a market correction coming along here shortly.
I also have some sell orders in for a divvy stock that if/when it hits, will net me a decent return (15% or so) even after the dropoff that it had earlier in the year.

That gutsy of a person … usually. The only difference is that I finally talked myself into locking in some of the increases by shifting back to cash a little more, and then back in more when I feel the time is right. Using the old put it in and forget it mostly gave me nothing after 4-5 years.
Keep in mind that the bulk of my cash is going into a high yield bond fund currently hitting about 6.8%/yr

Great results! I, too enjoyed a great year in the stock market, real estate (LA & SF) and a few miscellaneous things. It is much easier to handle the ups and downs of everything else when your investments (including real estate) is increasing. I took a flyer on a new Biotech the beginning of December and enjoyed a 15% increase in one month. Nothing is guaranteed, but a few calculated risks can be rewarding. I am really positive for 2014.

Nice job Larry. As a multi property landowner, you must be thrilled! Do the gains make you question why bother working anymore? I do realize you’d like to get that maximum teacher pension, as would I since it’s only several more years.

Of course, I question it, but quickly dismiss that thinking. I try to keep my focus on the goal which is December, 2016. I think it is the earliest I want tot retire, but it it could change. That means I could go longer, but not shorter. I see that date as the perfect storm of maxed Social Security and a reasonable pension. I do not think I am ready mentally to retire yet. I still lik eteaching although I do not like floating from school to school.

Happy New Year Sam and hope you have more hits than misses in 2014! 2013 sounded excellent though. I’m surprised you didn’t talk about tennis much in this post! I was going to point out that my fiance is also 5’10 and about 170, and his ideal is about 180, and he’s very lean. My net worth grew by over 50% this year, thanks to finally getting out of consumer debt and stepping up my savings rate.

2013 was excellent for tennis, but we LOST in the City Championships this year after our singles player lost 4-6 in the 3rd set after being up 4-1!! My doubles partner and I went 2-0 in the two playoff matches. Because we won the 2012 SF City Championship for 4.5 level, 2013 was a relative disappointment. I can’t wait for the season to get started again!

Your man must be pretty muscular, b/c 170lbs at 5’10” is like a middle weight boxer!

I found a league in my area but am starting out with just playing matches with the members of the league for now. Your league experiences sound great though and it motivates me to hurry up and get back in the swing of tennis and join! Middleweight boxer, I like the sound of that!

Congrats on a successful 2013! One of my biggest misses on the year was also a hit. I was a bit too conservative with what I invested in one of my growth stock picks. It’s up 152% since I bought some, and all I can do is kick myself for not investing as much as I initially wanted to.

Man, I hate missing out on huge gains! It’s almost as bad as losing money! It’s so interesting how greed takes over. 2013 made me more greedy b/c my total equities investment allocation underperformed. But I know as soon as I get greedy that’s when money is lost.

Thanks for noticing the site redesign. We’re ironing out all the kinks now and stuff. Gotta get used to knew things like the comments section. If you see anything that looks off or needs improving, please let me know!

Regarding your book sales, I think price is only one factor. To be honest, most books I’ve bought online haven’t been the best and I’m sure others share in this experience so they hesitate to make the purchase. The most recent I bought was Michael Hyatt’s book on getting published. Most of the information there I found from browsing forums and reading older books, or using a bit of common sense. The content was far less than I thought and it was presented in an unusual “PDF book” fashion that he did mention, but I didn’t quite grasp. If you gave a screenshot on your sales page of the inside of your book (so people can see how much info they can expect to receive, word counts sometimes pass over people’s head), dropped the price a bit ($40+ is too much! There are old medical textbooks that go for that much and the knowledge in those are derived from hundreds people over the years — just to give some perspective), and put your book up on alternate marketplaces (Apple and Amazon bookstores), I think you’ll be set.

I think $9.99 is a good price, still high for the Amazon market, but still within reason. If you do these things, keep up with the awesome “Get Laid” campaign (maybe put together another campaign to target a different audience), and are able to talk a few of your readers into writing reviews on the marketplaces then I have a feeling you’ll be seeing three-figure sales per month in 2014. The most successful ebook authors have been those with multiple books, each priced very low at under $5, averaging a few thousand total books sold per month from their combined portfolio.

Thanks for the thoughts Yuse. I am either going to raise the price to $98 to create the ultra premium brand route, or try the mass market Amazon route. The mass market route would certainly spur sales, and could actually bring more readership too.

Quite the year, Sam. I think this post is a great start in the “Look at me” campaign :) I would think of it less like self-promotion, and more like ‘inviting others to join you in your story’

Glad to hear your first full year of 100% entrepreneurship is working out well, but not too well, so as not to keep you lazy ;)

My year has been quite exciting as well, with a HUGE jump in house values, great returns in the market (Roth and 401k), and blog growth. Hoping to continue the momentum, even as baby #2 arrives this month.

Thanks for the inspiration as always, Sam, and hope to meet you for reals this year in New Orleans!

Happy New Year! I like the new look. Great job in 2013 especially on the online income side. Sorry to hear about the disappointing sale of the book. Maybe you should try cut rate for a month or something like that. Then concentrate on making more money with the consulting service.
For 2013, I’m really happy about survival too. It’s my full year being self employed and the concept is now proven. As for the downside, it’s the lack of time. It seems like I don’t have time to do anything. I need to outsource a few more things and also get more help with the kid.
Good luck in 2014.

Fascinating and in depth review. I really need to take some time and reflect more. Maybe I can learn a thing or to, haha. As for the stock market, you win some you lose some. When I tried to go more aggressive and get into stocks more, I got creamed, 100%. 30%+ is hard to ignore, but sometimes going aggressive can get you in trouble. Another friend who tried to flex his muscle on stock picking lost on every trade. He also sold some winners. If he had stayed still, he would have doubled his portfolio. Ouch. Sometimes we are our own worst enemy… I’m a horrible networker and self promoter, too. After a nice burst at BlogWorld LA a few years ago, nothing since. I’m thinking I need to hit FinCon this year. You going this? If so, perhaps I can finally meet the man, the myth, the legend. I dig your new look from Andrea. Happy New Year!

Hi Buck! I’m definitely going to go to New Orleans this year for Fincon. I’ve never been and was so close to going last year but didn’t. Perfect excuse to go, and then go on a cruise to Mexico! Hope to see you there.

Glad to hear 2013 went well. I also enjoyed financial success in the year despite an effective tax rate of 28% (set to be about 30.5% going forward). I suppose Uncle Sam (the more greedy one, not you) always takes his cut.

Net worth increase from $75k to $120k (excludes a condo I got for around $90k). Partly due to investment gains but largely due to saving as much as possible (currently ~35% of gross salary–being young, single, and getting a thrill by saving rather than spending is working some magic for me). Going into 2014 and beyond I’m hoping to have a nice buildup of passive income through a combination of securities investments and (hopefully) some real estate if the right property comes along.

Three years ago in my senior year of college I thought the secret to success and happiness was simply making a lot of money. Two years into the working world and I’m loving it, but like you I don’t see myself being able to continue this indefinitely. Too many things I would like to accomplish and time to spend with family and friends than I could if I continue running on the hamster wheel at work. My new goal is to have enough money making money for me so that I am never tied to my job or anything else that I don’t enjoy.

I hope you keep things up with the blog. I’ve enjoyed reading your pieces since last summer and look forward to more good stuff.

A 30.5% effective tax rate is large! Check out the TITTS Ratio when you get a chance. It’s a savings guide based on the amount of effective taxes you pay.

It is actually GREAT you don’t want to work indefinitely two years out of college with your financial situation b/c that likely means you are going to continue saving like a maniac and do good work so you no longer have to work forever!

Great year-end post, Sam. And congrats on your success this year. I, like others, am glad to have found this blog and I’ve become a regular visitor.

Since others are sharing their financial progress (can we call it that) for the year. While I’m not nearly as well off (yet!) as most or all of you, I am making good progress and I’m tracking that progress in the best way possible for my situation.

As for investments, my 401k, which represents ~85% of my investment assets, was up 25% this year! I’m aggressive with my tolerance and I’m pleased with this performance. I attribute my comfort with stocks to being a former stock broker (series 7, 63, and 65 licensed, Sam!) I’d be interested to know from others what their investment allocation percentage is for international stocks – keep in mind that the US only represents a portion of the world’s business!

As for my net worth, I still owe more than I own BUT my debt ratio has gone from 289% to 173%. My debt ratio has been dropping by about 9.5% a month. I’ll confess that over this year, much of that pace should be attributed to the above average growth of the stock market and I’ll be keeping that in mind as I strive to pay off more of my debt this year.

A major goal of mine this year is to get my wife more committed to saving. She’s not a spender but doesn’t have the savings addiction yet.

Cheers to all on your own endeavors and to all of us making prosperity reality (again) in 2014!

Howdy JW, good job on your progress! Curious how you calculate your debt ratio and what does the debt consist of? How do you go about balancing contributing more to your investments and paying off debt? Finally, how’s the Bay Area treating you? Getting used to the weather and costs?!

Since we last chat, not counting the 13% housing bump in Seattle, 2013 yielded 49% for me. Setting limit stop orders was a great way to partake and do macro economically informed investing. The real economy is recovering with jobs hovering around 195,000 jobs a month. GDP growth is robust. QE for all the hyperbole simply is less important than the zero percent interest that will stay in place for a while maintaining historically low mortgage rates. All in all, 2014 may not rise to the same degree but given the real macroeconomy is actually gearing, I would discount it either.

The debt ratio I’m using is simply total assets / total liabilities. Assets does not include the value of my car, but perhaps I should add that in. The liabilities includes every penny I owe, which is mostly student loan debut but also a small amount of credit card debt and a car loan that’s three payments from paid off.

The balance between paying myself first and paying down my debt (which is kind of the same thing I guess) is tough for me. I’m a sucker for wanting to see my savings grow. I have to remind myself that a dollar paid toward credit card debt is an automatic 20% return on that dollar.

The Bay area is treating us well although I’d prefer a snowstorm or five in Tahoe. Northstar is only 30% open!? How long have you lived in the area?

Your logo is being called in via CSS. This is certainly not a best practice and it won’t be indexed if you leave it that way. If you want to leave it as just an image you should call it in via php or html. However, at minimum I would get rid of the image for iphone (media queries with resolution <320). If you know what font you're using you can use that instead of an image. As a practical matter you'll notice that you have too much white space on top and bottom of the image in when viewed on iphone.

If you don't want to mess with all this and just stick to an image you can add this to your CSS:
.header-image .site-title a {
min-height: 77px;
}

That should provide a decent enough fix to minimize whitespace around the logo on phone and still look good everywhere else. This appears to be a custom theme so I am not sure if you have any easy css customization options in the admin.

For SEO purposes, and if you change the logo to actual text and not just an image, I would suggest making sure that the logo is H1 on your homepage and H2 on any other page. On pages other than home you should make sure that the title of the page is H1.

I truly enjoyed your yearly wrap-up. As I just started my own blog, it has been one of those try things out and see what happens. I just keep pounding the pavement and making some gains but I always feel I could be doing more. Yes, a workaholic tendency like you.

I’ve been writing my own book throughout 2013 and my goal is to get that out in 2014. I’m curious in how it will do and although it’s not a financial or money related book (It’s about backpacking through 20 countries) writing it was an escape from blogging about money and updates of Phroogal.

Sounds like you had a great year! Don’t worry about the busted lip, that is just memory jogger for future story telling.

After reading your blog, I became motivated get a website up and running to promote an area of the country that I really enjoy and want more people to experience. Your blog has also helped me get more involved in the social aspect of the internet, which has helped me immensely!

Thanks again for all your efforts and I look forward to following you in 2014.

Sounds like you had a great year, keep it up! Enjoy yourself and keep building the wealth. Its amazing that building wealth has no limits practically.

I myself had a great 2013, got to do about 2 and half months of traveling. Got my open water dive cert and advance cert while I was in thailand. The diving was great, the food, the life, everything.

I also managed to up increase my net worth 1/3. Mostly this was because of aggressive savings from my income and some from contributing into the market throughout the year. My only regret was is not heavily investing into the market like I should of.

Right now my net worth is 330k according to my Personal Capital accounts. This is all cash and my investment portfolio/IRA, currently I am just invested diversely into index funds with vanguard. I have been looking into individual stocks too, looking for those unicorns as you call them. I do not own any property or anything else. I also got into P2P lending for about the last 7 months, things are all well there too. My account is relatively small compared to my net worth. So far I have about 6600 dollars into it, invested diversely with each loan at 25 dollars each, around 250 plus loans so far. I have been reinvesting my interest payments as they arrive. And occasionally adding the extra 500 or so a month to keep building it.

Things are good I can’t complain. I am 29 years old turn 30 this year. My goal is to keep investing heavily and have fun when I can. When it comes to investing I need to up my knowledge and not be so afraid. Have to keep telling myself I have time.

I had about 105 days off in 2013, I’m not a teacher. I was in the army before and currently working as a security consultant overseas. My time off is not really flexible though it just depends when my leave dates line up. But it’s generally 105 days on and 35 days off. I only came back to the states for only 15 days in 2013! Saving money is extremely easy for me, since I have basically zero living expenses and food is provided. But when I work I really work but when I’m off I’m totally off for almost 5 weeks to do whatever I please!

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